Common Characteristics

Every market has its own personality, its own characteristics.

After working the gold mining indices GDX, more specifically GDXJ, a repeating trendline tendency was observed in leveraged inverse, JDST.

That repeating market behavior, shown below.

Junior Miners, Leveraged Inverse, JDST

The un-marked daily chart, first

Repeating trendlines

The next several charts zoom-in on specific areas.

Set The Stop

And walk away …

As the tagline in this post shows with JDST-22-04, we’re already short the Junior Miners via JDST (not advice, not a recommendation).

The current stop, is set at yesterday’s low of 6.61.

Depending on price action today, that stop will be moved up to the recent low (presently @ JDST 6.855).

Summary

GDXJ, reversed at Fibonacci 55-Days, 13-Weeks from the January 28th, low.

As presented in this update, we’re also Fibonacci 89-Weeks (+1), peak-to-peak.

Time correlation coupled with price action, along with incessant financial press ‘gold standard‘ narrative, gives a near perfect backdrop for a significant downside reversal.

The trade may or may not work out … price action is the final arbiter. However, we’ve already shown the trend characteristic of the market.

A simple but effective way to manage the trade is to follow that trend, raise the stop accordingly and exit when stopped out (not advice, not a recommendation).

Stay Tuned

Charts by StockCharts

Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

The Danger Point®, trade mark: No. 6,505,279